Fed Reserve president compares crypto to Beanie Babies

Minneapolis Fed president Neel Kashkari has renewed his criticism of cryptocurrencies.

This time, he is comparing crypto to the 1990s Beanie Babies bubble and arguing that crypto still fails to offer meaningful economic value.

Kashkari made the comments during a recent appearance on CNN , where he was asked about the latest bout of crypto market volatility and whether the sector is entering another bubble phase.

"I have compared crypto to Beanie Babies for a long, long time,"Kashkari said.

"Trillions of dollars are going to be invested in AI, and I am much more confident that AI is doing things that are actually useful in the economy. Will all that investment pay off? I don't know. But at least there are real use cases for AI. I can't say that for crypto."

Kashkari questions crypto use case

The Minneapolis Fed chief, one of the United States' central bank's most outspoken crypto skeptics, reiterated that he still does not see a compelling reason for digital assets in everyday financial activity.

"I just ask people what you can do with it in America for a decade, and I haven't gotten any good answers,"he said.

Kashkari argued that the primary example he hears is using crypto to circumvent banking rules such as know-your-customer and anti-money-laundering requirements. 

"That sounds lousy to me as a Federal Reserve policymaker," he added.

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He also dismissed claims that stablecoins provide a superior payment mechanism.

"People say stablecoins are a little bit different, that they should be safer. But I still don't know what problem that is solving. I can send you $5 on Venmo — that is effectively a stablecoin. So what is this new crypto thing doing that existing products like Venmo or PayPal can't do?"

Kashkari said he spends little time thinking about the sector: "I am much more interested in AI and what it means for the future of the economy."

Why the Beanie Babies comparison matters

Beanie Babies, a line of collectible stuffed toys released in the 1990s, became a textbook example of speculative mania after secondary-market prices surged on hype and perceived scarcity rather than underlying value. 

The bubble collapsed by 1999, leaving many collectors with items worth a fraction of what they paid.

Financial commentator Dave Ramsey has also used the analogy. In an Oct. 10 segment on The Ramsey Show , the personal finance host urged a Pennsylvania caller to sell their crypto holdings to pay off debt, saying it had "no place" in a long-term wealth-building strategy.